Penn Entertainment (NASDAQ: PENN) might contemplate a technology-focused acquisition this year to bolster its ESPN Bet online sports wagering segment. 

According to Eilers & Krejcik Gaming (EKG), as stated in a recent report, technology plays a crucial role in the pricing and trading strategies of sportsbook operators. It's crucial for live betting availability — a domain where ESPN Bet has recently performed badly.

"ESPN Bet ranked fairly low in our recent testing of NFL live betting uptime, and we wouldn’t be surprised to see ESPN Bet operator Penn National buy some tech to boost its performance here,” according to the research firm.

Live or in-game betting generates revenue for gaming companies and is deeply embedded in technology. Industry analysts anticipate that gaming firms will be seeking tech partnerships in 2025 as online sportsbook operators aim to enhance customer acquisition and retention strategies and technology frameworks. These acquisitions can also be beneficial for assisting operators in entering new digital gaming sectors. 

Indications that ESPN Bet is Concentrating on Technology 

In the realm of online sports wagering, technology is essential for a different purpose: ensuring customer contentment. This is one reason DraftKings and FanDuel often rank highly in customer satisfaction and ease of use polls. Interestingly, data shows that ESPN Bet is attracting a younger clientele compared to rivals like DraftKings and FanDuel. 

This might indicate that some of ESPN Bet's initial technological initiatives are yielding results. These involve connecting ESPN Bet accounts to ESPN's digital platforms and the appointment of Aaron LaBerge as chief technology officer (CTO) in April of last year. He spent two decades at Disney before, which included time at ESPN. However, there is effort that needs to be accomplished. 

Operators are increasingly seeking technology to drive highly lucrative same-game parlays (SGPs) and to differentiate themselves from rivals. 

“As the U.S. OSB app market consolidates, we are seeing a natural backlash from our testers: why does everything feel the same?,” adds EKG. “With SGP kind of maturing, where is the next major, differentiated feature to break through in the minds of OSB app users? FanDuel’s Your Way Parlay and other line-setting functionality appears to be the early frontrunner.”

Possible Targets for Penn 

Rumors about the consolidation of sports betting technology abound, suggesting there are many potential takeover targets, yet Penn has not verified that it is pursuing any such arrangement. 

Referring to channel checks, EKG highlighted gaming technology provider and software developer Huddle Tech as an instance of a sports betting technology company that is “currently undergoing a sales process.” This has not been disclosed publicly, and it's uncertain whether Penn would participate as a bidder for that company. 

Huddle is the unified organization created through the merger of Huddle Gaming and Deck Prism Sports, based in Las Vegas. Established in 2019, Deck Prism is a trailblazer in in-play markets for the NFL, NCAA football, NBA, NCAA basketball, MLB, and NHL.